Elēt Realty was started to provide a home for independent agents to grow their brand in the real estate industry. Our vision and focus is to help our agents become successful in the real estate industry through broker support, training and lead generation.
Scott Gray, Partner and Broker has 25 years in selling Commercial real estate and Lynn Nichols has spent the last 30 years selling financial services and residential real estate.
Elēt Realty is a membership flat-fee based real estate company. The agent keeps the majority of commissions earned on their business.
Some of the first things to consider when you are buying a home are how much you want to spend, where you would like to live and what is important to you as a buyer. Here a few questions to ask yourself:
How much house can I afford?
Am I going to take out a loan?
How much do I have saved for a down payment?
Can I afford my desired neighborhood?
Are home values increasing or decreasing in the neighborhood?
How long will my commute take?
Is the school district a fit for my family?
Is it within walking distance to amenities and activities?
Once you have the answers to these questions nailed down, you can start your home search.
Here are the 10 most important steps to take when buying a house.
Step 1: Check your credit score
Before you permit a lender to check your credit score, you will want to do a thorough review of your own credit report.
What is a credit report? A credit report pulls data from three major credit reporting agencies: TransUnion, Equifax, and Experian. It is the report used to calculate both your FICO score and your Vantage score.
You can get free reports from all three reporting agencies, at least once each year. If you find any errors in your report, dispute them immediately so they can be resolved before you apply for financing.
The higher your credit score, the lower the interest rate you will receive. A credit score of 720 or higher will get you a good interest rate on a conventional loan, Payment history
Length of credit history
Type of credit
Step 2: Figure out how much house you can afford
When you get pre-approved, your lender will tell you the maximum amount you are able to borrow (we will talk more about the pre-approval process later). But you do not need to wait for the pre-approval to get a general sense of what you can afford.
Prioritize your wish list to fit your budget
Once you have a rough budget in mind, make a list of must-have home features. Your price point will likely dictate the size, location, and amenities of your future home. Here are a few examples of wish list items to consider:
Number of bedrooms and bathrooms
Type of home
Layout, features, and finishes
Step 3: Find a real estate agent
Most buyers find it helpful to have a professional real estate agent on their side to guide them through the process. Typically, sellers fund the buyer’s agent commission, which makes using an agent a cost-effective option for buyers.
Here are some areas where a buyer’s agent can help:
Market insights: identifies home value trends, new developments, buyer demand and overall state of the market
Offer price determines what a home is worth and recommends a competitive initial offer amount
Negotiating: knows when to argue for a lower price and how to negotiate contingencies and repairs
Localfamiliarity: has insider tips about the neighborhood and area schools
Professionalrecommendations: provides referrals for a trusted lender, attorney, contractor, or other vendors
Experience: simplifies the process by handling hiccups, staying on top of due dates, and overseeing paperwork
Step 4: Get pre-approved
Unless you are buying a home with all cash, getting pre-approved by a lender will give you an official verdict on your home buying budget. To get pre-approved, a lender will calculate your debt-to-income ratio and assess your overall financial health by reviewing your:
Income statements, like W2s, 1099s, rental income and tax returns
Assets, like bank statements and retirement accounts
Debts, including monthly expenses like student loans, credit cards and other mortgages
Records of bankruptcies and foreclosures
Current rent, child support payments, alimony payments and any down payment gifts
When you are pre-approved, you will receive a pre-approval letter. Not only does it officially let you know how much you can borrow, but it can come in handy when submitting an offer. A pre-approval letter shows a seller you are serious about buying their home. This is especially important in a hot market when you are likely competing against other offers.
Keep in mind that your debt-to-income ratio will be examined again before closing. Taking on new debt during the loan approval process can limit the total loan amount available to you during financing.
Step 5: Start the home search
Searching available homes online is a great way to start your house-hunting process. According to the Zillow, 88% of buyers use online resources in their home search. When you feel confident about where you want to live, hire an agent to help you through the process. Additionally, your agent can send you listings and schedule showings.
What to look for when touring homes
Once you start visiting homes in person, be sure to consider the home’s “health” so you’ll have an idea of any major challenges that might be coming your way if you decide to make an offer. Ultimately, the inspection will give you an official report on the home’s quality and condition, but while you are touring, keep an eye out for the following:
Structural defects and cracking
Water pressure (turn on faucets and shower heads)
Electrical issues (try the light switches)
Functionality and heat retention of doors and windows
Roof and exterior quality
Step 6: Make an offer
Once you have found the right home, you should make your offer based on a comparative market analysis (CMA) done by your agent. The CMA is a calculation of a home’s market value based on comparable recent sales in the same area.
Using the CMA as your baseline, your agent should help you determine a fair offer price and help you decide if you should leave some room for negotiation.
Above and beyond the CMA, here are some other things to take into consideration when making an offer:
Disclosures: Disclosures are known problems related to structural issues, unpermitted work, natural hazards, and flood risks. Most states require sellers to provide disclosure documents, so make sure your agent requests them.
Closing date: When you are buying a home with a mortgage, it will take 30-45 days after the contract is executed to close on the home. When you submit an offer, you can request a later closing date to fit your moving timeline, but the seller may push back on this request.
Earnest money: An earnest money deposit is a sum of money you are willing to put down when you make your offer to show that you are serious about buying the home. If you close on the home, the earnest money simply becomes part of your down payment.
Step 7: Schedule the inspection
Eighty-two percent of buyers conducted an inspection on a home they were buying, according to Zillow. Including an inspection contingency and completing a home inspection are the best ways to ensure the home you are buying does not have any major underlying issues.
Your real estate agent should be able to recommend a trustworthy, licensed home inspector
Usually, the inspection is scheduled within a week of the contract being signed. It is recommended that you attend the inspection, as it is a good way to get a better understanding of the inner workings of the home. Usually, your agent will attend as well. After you receive the official inspection report, you will have time to discuss the findings with your agent and decide how you want to respond to the seller.
Step 8: Secure your financing
Even if you have been pre-approved, you still need to take a few additional steps to officially submit the mortgage application. Once you have completed the following steps, assuming everything checks out, you should receive the “clear to close,” which means that the lender has approved your purchase.
Your lender will hire the appraiser, so there is not much for you to do here. Your real estate agent should work with the seller’s agent and the appraiser to schedule the appraisal. After the appraisal is complete, you and your agent will receive copies of the appraisal report, so you can see the appraised fair market value and check out the comps that were used in the calculations.
Step 9: Purchase a homeowner’s insurance policy
You will need to have proof of a homeowner’s insurance policy before closing, so if you already own a home, ask your existing agent to help you open a new policy. If you do not own a home, shop around for a policy that works best for you. Your lender and real estate agent may be able to help you coordinate a policy that can be paid through your monthly escrow account.
Step 10: Close and move
Many buyers choose to have a final walkthrough a day before or the morning of closing. Its purpose is to be sure that the property looks the same as when you made your offer and that the seller completed agreed-upon repairs (if applicable).
On closing day, expect to spend at least a few hours at the title company signing paperwork. You should also be prepared to bring funds to cover your closing costs, which typically range between 3-5% of the sale price.
Once the signing is complete and the sale is recorded, you will receive your keys. The house is yours!
You can now set up utilities for the new home — things like electric, cable and internet. If you are buying a condo with an HOA that covers some utility costs, double check contract responsibilities with your real estate agent.
Finally, get ready to move and settle into your new home.